The proposed free trade agreement between India and Canada, which aims to reduce or eliminate duties on a large number of products traded between the two nations, is likely to be concluded by March next year. Negotiations for the agreement were launched by both countries in November 2010 to further boost bilateral trade and investment.

The proposed pact seeks to open the services sector and facilitate investment. One obstacle to signing the FTA is India’s highly protected market and the entrenched positions of both sides on key sensitive issues. Canada wants a lot in terms of access for its goods in a highly protected market, but has relatively little to offer in return because tariffs are already relatively low. And Canada is reluctant to give the one thing India really wants – freer mobility of visitors and temporary service workers.

It remains to be seen if the agreements include an investor-state dispute settlement provision. India was previously opposed to the controversial provision. There are charges that the FTA will promote the rights of transnational corporations at the expense of the rights of local communities to make their own decisions about social, cultural, environmental and economic policy.